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Article
Publication date: 6 June 2016

Sawsan Saadi Halbouni, Nada Obeid and Abeer Garbou

This paper aims to investigate the role of corporate governance and information technology in fraud prevention and detection within the United Arab Emirates (UAE).

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Abstract

Purpose

This paper aims to investigate the role of corporate governance and information technology in fraud prevention and detection within the United Arab Emirates (UAE).

Design/methodology/approach

This study uses a survey of financial accountants and internal and external auditors to assess their perceptions of the effectiveness of IT and corporate governance as measured in terms of the audit committee’s effectiveness, internal audit functions, external audit functions, culture of honesty and employee training programmes in preventing and detecting fraud in the UAE.

Findings

The results indicate that corporate governance has a moderate role in preventing and detecting fraud in the UAE and that IT has the same role as traditional fraud prevention and detection techniques. The results also show no significant difference between internal and external auditors in their use of technological and traditional techniques during the course of audits.

Research limitations/implications

The findings suggest that the senior management and boards of directors must better understand the importance of their oversight function. The finding that a culture of honesty has a low positive impact on fraud prevention and detection in the UAE indicates that chief executive officers and boards of directors must make more efforts to set the “tone at the top” to improve the corporate environment in terms of integrity and ethics, among other factors. Furthermore, as IT and traditional techniques provide the same function, senior management and boards of directors must be alerted to the importance of developing systematic approaches to fraud investigation that involve greater reliance on technological approaches.

Practical implications

The moderate role of corporate governance suggests that senior management and boards of directors must better understand the importance of their oversight function to meet their obligations and fiduciary responsibilities to stakeholders. Furthermore, greater adoption of IT to detect and prevent fraud contributes to developing a systematic approach to fraud investigation, capable of identifying unusual activity using effective software.

Originality/value

This study contributes to the literature on the role of corporate governance and IT in preventing and detecting fraud, particularly for Middle Eastern countries and other emerging nations. The study may provide insights to academics and practitioners in the UAE and their international counterparts.

Details

Managerial Auditing Journal, vol. 31 no. 6/7
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 23 November 2012

Sawsan Saadi Halbouni and Mostafa Kamal Hassan

The purpose of this paper is to examine Johnson and Kaplan's claim that “external reporting influences managerial accounting information” in an emerging capital market…

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2653

Abstract

Purpose

The purpose of this paper is to examine Johnson and Kaplan's claim that “external reporting influences managerial accounting information” in an emerging capital market, the United Arab Emirates (UAE).

Design/methodology/approach

The paper relies on a survey instrument and institutional theory analysis in order to: first, explore accountants' perceptions of the extent to which financial accounting conventions‐based information is utilized, instead of managerial accounting information, in internal decision making; and second, articulate respondents' perception to the UAE's wider social and institutional context expressed in terms of accounting regulars, accountancy profession and partnership with multinational companies.

Findings

In line with Johnson and Kaplan's claim and contrary to the studies of Hopper et al., Joseph et al. and Scapens et al., the paper's findings show evidence of financial reporting domination on managerial accounting information in the UAE. Locating such results in a UAE companies social and institutional context, the paper reveals that the activities of regulators and accountancy professionals pay more attention to financial reporting, an issue which contributes towards reinforcing respondents' general perceptions that management accounting is subservient to the demands of financial reporting requirements.

Research limitations/implications

Although the paper's findings trigger the importance of the UAE's institutional context in reinforcing accountants' perceptions, the interaction between financial accounting requirements and managerial accounting information is an area that needs further in‐depth case‐study‐based investigation in emerging market economies.

Practical implications

The paper's findings highlight the type of information that UAE's managers utilize when making decisions. These findings are in the interest of business investors and the accountancy profession that aims at increasing practitioners' professional knowledge.

Originality/value

This is one of few papers that combine survey results and institutional theory analysis to explore whether financial accounting dominates managerial accounting information and, at the same time, provides an understanding of the underlying reasons behind that domination in an emerging market economy such as the UAE.

Details

International Journal of Commerce and Management, vol. 22 no. 4
Type: Research Article
ISSN: 1056-9219

Keywords

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Article
Publication date: 31 May 2013

Mostafa Kamal Hassan and Sawsan Saadi Halbouni

The purpose of this paper is to investigate the effect of corporate governance mechanisms on the financial performance of the United Arab Emirates (UAE) listed firms.

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3052

Abstract

Purpose

The purpose of this paper is to investigate the effect of corporate governance mechanisms on the financial performance of the United Arab Emirates (UAE) listed firms.

Design/methodology/approach

Relying on a sample of 95 UAE listed firms affiliated to financial and non‐financial sectors, the paper performs a cross‐section regression analysis to test whether there is a significant relationship between governance mechanisms (voluntary disclosure, CEO duality, board size, board committee and audit type) and UAE firms' performance while controlling for firm size, industry type, firm listing years and leverage. The paper relies on data published on year 2008 and utilizes the accounting‐based measures of Return on Assets (ROA), Return on Equity (ROE) as well as the market measure (Tobin's Q) in order to measure the UAE firms' financial performance.

Findings

The empirical results show that voluntary disclosure, CEO duality and board size are significantly influencing the UAE accounting‐based performance measure, while none of the governance variables significantly affects firms' market performance measure. The results also reveal that firm size is the only control variable that significantly influences firms' performance. This paper provides evidence showing that the accounting‐based performance measures are more objective in the years where unstable economic conditions exist.

Practical implications

The paper's findings indicate that the underlying principles of corporate governance are applicable in emerging markets. The findings are important to regulators, investors, managers, and researchers aiming at developing new policies that establish better regulatory infrastructure that increases investors' confidence and attracting foreign investment.

Originality/value

The paper is one of very few studies that examine the relationship between corporate governance and firms' financial performance under economic turbulent in an emerging market economy, the UAE.

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